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FLOWS
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Wednesday, 20 August 2014
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BUY
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TM, GENM,
SKPETRO
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SELL
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DIGI, MAYBANK,
TENAGA
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STOCK ALERT
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STOCK NAME
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DATE
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PRICE
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BUY/SELL
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TARGET PRICE
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SILKHLD (5078)
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20/8/2014
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RM1.11
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BUY
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RM1.25
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Stock retraced 17% from recent high before
consolidating in a trading range of RM1.10 – 1.03. Yesterday, provides the
first sign of breaking out from this range with a close above RM1.10,
triggering a buy signal. For FY7/13, Silkhdg derived 80% of its revenue and
>100% of its PBT from the oil & gas sector. Its legacy business being
the operator & concessionaire of the SILK Highway which has been
loss-making since its inception and Co announced in June’14 that it has
entered into a conditional sale agreement to sell SILK for RM395m for cash (
versus audited nest assets of SILK as at 31/7/13 of RM27.9m). With the
divestment of the loss-making wholly-owned subsidiary, Silkhdg’s bottomline
is expected to improve significantly from its strong operating leverage in
its offshore vessels fleet expansion programme. Silkhdg’s fleet size was
increased from 12 OSVs in 2012 to 17 OSVs currently and 19 OSVs by end 2014.
All its existing OSVs are on long-term charter. In addition, Silkhdg is
enjoying vastly improved chartering rates compared to last year. Buy
(PT/LJN)
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PANTECH (5125)
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20/8/2014
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RM1.06
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ACCUMULATE
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RM1.25
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Stock retraced about 8% from recent high of
RM1.15 with macd on the verge of cutting upwards. Pantech is a one-stop
provider of pipes, fittings and flow control solutions which targets the
higher-margin O&G sector. Pantech is expected to have positive newsflows
over the next few months as it is a likely beneficiary of the USD27b Refinery
And Petrochemical Integrated Development (RAPID). Despite its given
potential, the stock is still undervalued compared to its peers & the
broader market. It trades at PER of 11.66x (FY2/15) & 9.38x (FY2/16)
versus its other small & mid-cap peers average PER of 15x & 12x.
Pantech also provides an above-market dividend yield of 4.2% & 4.8% for
the next 2 financial years. Its stainless steel plant has shifted production
from stainless steel pipes to fittings which have higher margins. It has
managed to penetrate more export markets due to UK-based Nautic Steel
products which carried higher margins and are approved by many of the oil
majors. It is also raising its production capacity at its carbon steel plant
(currently running at full capacity) by 13.5% this year. Last year, Pantech
acquired a second plot of land near Nautic’s existing factory and invested in
new equipment to expand product range. Utilisation stands at 75% following
the capacity increase which is supportive of growth over the next 2 years.
Accumulate
(PT/LJN)
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Calls for AUGUST WEEK 2/ WEEK
3 2014
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STOCK
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Initiation Dates
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Initiation price
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BUY/SELL
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TARGET PRICE
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LAST PRICE
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% Change
since Initiated
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SEM (5250)
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13/8/2014
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RM1.82
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TRIM
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BB- RM1.60
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RM1.85
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+1.6%
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CARING (5245)
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13/8/2014
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RM1.84
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Buy on weakness
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RM2.00
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RM1.86
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+1.0%
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IOICORP (1961)
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14/8/2014
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RM5.00
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TRADING SELL
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BB- RM4.40
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RM4.99
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-0.2%
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SYMLIFE (1538)
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14/8/2014
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RM1.12
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ACCUMULATE
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RM1.60
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RM1.22
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+8.9%
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WTK (4243)
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15/8/2014
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RM1.40
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ACCUMULATE
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RM1.60
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RM1.42
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-1.4%
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AIRASIA(5099)
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15/8/2014
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RM2.36
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ACCUMULATE
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RM2.70
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RM2.39
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+1.2%
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UMWOG (5243)
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18/8/2014
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RM4.05
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ACCUMULATE
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RM4.53
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RM4.06
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+0.2%
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PRESBHD (5204)
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18/8/2014
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RM2.25
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ACCUMULATE
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RM2.70
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RM2.20
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-2.3%
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SBCCORP (5207)
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19/8/2014
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RM2.17
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Trading BUY
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RM2.91
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RM2.15
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-1.0%
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MUHIBBAH (5703)
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19/8/2014
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RM3.14
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Trading BUY
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RM3.50
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RM3.21
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+2.2%
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Performance
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Positive
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Negative
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Neutral
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